Comercio Internacional de productos Cárnicos

25/08/2010

UPEMI : Margins of European pork producers will fall to almost zero

One hot summer in Russia can make the European pork producers to be below the line in a
few months – as reported by the Union of Manufacturers and Employers Meat Industry
(UPEMI).
As explained by the UPEMI - according to recent estimates for drought and fires, yields of wheat
in Russia will fall by a quarter, which is why President Vladimir Putin introduced a ban on
exports in order to prevent an increase in grain prices in the internal market. Russia is a power
among the world exporters of wheat, hence the export ban will drastically reduce the amount of
grain available to global markets, and consequently lead to higher prices, which in July, has
already soared by 40 percent.
What does all this mean for the pork market? “The average share of food in the total cost of pork
production in Europe is 55 percent, which leads to a positive correlation between the price of
grain and pork, “- says the statement by UPEMI. " Historically, hot summer in Russia results in
higher cost of feeding pigs and minimization in the margins of European manufacturers’ pork to
almost zero."
Source: portalspozywczy.pl